FCA Handbook - CRYPTO 10 Qualifying cryptoasset staking

You are viewing CRYPTO 10 Qualifying cryptoasset staking as it appeared on 25/10/2027. The current version of CRYPTO 10 Qualifying cryptoasset staking was last updated on 25/10/2027.

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CRYPTO 10.1 Application

Who? What?

(1) Except as provided for in (2), this chapter applies to an authorised cryptoasset firm when arranging qualifying cryptoasset staking for a retail client.
(2) For the purposes of CRYPTO 10.5, the record keeping requirements apply to an authorised cryptoasset firm when arranging qualifying cryptoasset staking for any client.

In this chapter, ‘auto-staking’ means a qualifying cryptoasset staking service where:

(1) the retail client has designated a type of qualifying cryptoasset to be used in a qualifying cryptoasset staking service;
(2) the future holdings of the type of qualifying cryptoasset designated by the retail client are to be used in qualifying cryptoasset staking; and
(3) the firm is safeguarding cryptoassets or arranging cryptoasset safeguarding of the future holdings of qualifying cryptoassets designated by the retail client.

In this chapter, unless indicated otherwise or the context clearly indicates otherwise, references to a ‘qualifying cryptoasset staking service’ should be read as including references to auto-staking.

For the purposes of CRYPTO 10.2.4R, CRYPTO 10.3.8R, CRYPTO 10.4.1R and CRYPTO 10.5.3R, references to a ‘retail client’ or ‘client’ (as the case may be) who the firm is required to notify need only include a retail client or client where known to the firm.

CRYPTO 10.2 Information requirement

(1) A firm must provide a retail client with information about the firm and its qualifying cryptoasset staking service.
(2) The information in (1) must be provided to a retail client:
1. (a) each time that retail client instructs the firm to provide the qualifying cryptoasset staking service; and
2. (b) before one of the following, whichever is the earlier:
  1. (i) a retail client is bound by any agreement relating to qualifying cryptoasset staking; or
  2. (ii) the provision of those services.
(3) A firm must provide the information in (1) in a durable medium or via a website, mobile application or any other digital medium that the firm may be using in relation to the provision of its qualifying cryptoasset staking service (where it does not constitute a durable medium) where the website conditions are satisfied.

(1) Where a retail client has provided express prior consent for the firm to use any rewards earned in further qualifying cryptoasset staking, as opposed to rewards being transferred or allocated to the retail client immediately, the firm is not required to provide the information in CRYPTO 10.2.1R again in relation to the use of rewards in further qualifying cryptoasset staking.
(2) This is provided the use of any rewards in further qualifying cryptoasset staking is on terms that are the same as, or substantially similar to, the original qualifying cryptoasset staking service.
(3) A firm should nonetheless consider whether it would be in the best interests of the retail client for it to provide information about any further qualifying cryptoasset staking even where this is not required.

A firm must regularly – and at least once every 3 months – review the information provided under CRYPTO 10.2.1R(1). If necessary, the firm must update the information as soon as possible, to ensure it remains accurate and up to date.

A firm must notify a retail client in good time about any material change to the information provided under CRYPTO 10.2.1R(1) relevant to the qualifying cryptoasset staking service that the firm is providing to that retail client.

Content of the information

The information in CRYPTO 10.2.1R(1) must include:

(1) information about the qualifying cryptoasset staking service to be provided to the retail client;
(2) information about the qualifying cryptoassets that will be used in the qualifying cryptoasset staking service;
(3) information about the transfer and return of qualifying cryptoassets used in the qualifying cryptoasset staking service and any rewards earned;
(4) information about the retail client’s access to their qualifying cryptoassets and access to rewards earned;
(5) information about risks;
(6) any other information material to a retail client’s understanding of the qualifying cryptoasset staking service; and
(7) when the information was last updated.

Information about the qualifying cryptoasset staking service

Information about the qualifying cryptoasset staking service to be performed for the retail client should include:

(1) a description of the qualifying cryptoasset staking service, including whether the qualifying cryptoasset staking will be performed by the firm itself or by another person or persons; and
(2) where a qualifying cryptoasset staking service involves auto-staking, an explanation that the firm will use a retail client’s future holdings of one or more of the types of qualifying cryptoassets that the retail client has designated for that purpose in qualifying cryptoasset staking.

Information about the qualifying cryptoassets

(1) The information about the retail client’s qualifying cryptoassets to be used in the qualifying cryptoasset staking service should include, where applicable:
1. (a) that the retail client may receive a cryptoasset as part of the qualifying cryptoasset staking service;
2. (b) that there may be risks associated with any other cryptoasset provided as part of the qualifying cryptoasset staking service, such as the possibility of a change in value in comparison to the client’s underlying qualifying cryptoassets being used in the qualifying cryptoasset staking service;
3. (c) information on the functions and limitations of any other cryptoasset provided as part of the qualifying cryptoasset staking service, including whether it can be transferred, sold or used in any other qualifying cryptoasset staking service;
4. (d) the implications for the retail client of the transfer to another person of any cryptoasset provided to the retail client as part of the qualifying cryptoasset staking service; and
5. (e) information on how any other cryptoasset provided to the retail client may be returned to, or exchanged with, the firm or another person for the qualifying cryptoasset being used in the qualifying cryptoasset staking service, and any rewards earned (as applicable).
(2) A firm should provide further information, where appropriate, on the type, nature and uses of the relevant qualifying cryptoassets, and their blockchains, associated with the qualifying cryptoasset staking service provided. This could include providing links to QCDDs published in accordance with CRYPTO 3.
(3) In this chapter, including in (2), a reference to a ‘type’ of qualifying cryptoasset:
1. (a) refers to a qualifying cryptoasset on a specific network that uses distributed ledger technology (eg, blockchain); and
2. (b) may include reference to the digital token identifier, such as the Digital Token Identifier system outlined in ISO standard 24165.

Information about transfer and return

The information about the transfer and return of qualifying cryptoassets used in the qualifying cryptoasset staking service and any rewards earned should include, where applicable:

(1) information about any restrictions, including those not set by the firm itself, on the retail client’s ability to cease the qualifying cryptoasset staking service being performed for them, and to receive the return of their qualifying cryptoassets and any rewards earned, if applicable; and
(2) information about the amount of time required for qualifying cryptoassets used in the qualifying cryptoasset staking service and any rewards earned, if applicable, to be returned to the retail client, and whether and in what circumstances the amount of time is variable.

Information about a retail client’s access to their qualifying cryptoassets and rewards

The information about the retail client’s access to their qualifying cryptoassets and/or access to any rewards earned should include, where applicable:

(1) what access the retail client will have to their qualifying cryptoassets while those qualifying cryptoassets are being used in the qualifying cryptoasset staking service, including whether the qualifying cryptoassets can be transferred or sold at the retail client’s direction; and
(2) the implications of any transfer of ownership of the retail client’s qualifying cryptoassets used in qualifying cryptoasset staking and/or any rewards earned, including the implications in the event of the insolvency of the firm or any other relevant person who is holding any qualifying cryptoassets and/or rewards earned on behalf of the retail client.

Information about risks

The information about risks must include, where applicable:

(1) the identity of any person or persons the firm currently uses to perform the qualifying cryptoasset staking; and
(2) an explanation of the types of risks that may be relevant in relation to qualifying cryptoasset staking, including that the retail client may lose some or all of their qualifying cryptoassets used in the qualifying cryptoasset staking service in the event of operational disruption.

When considering its approach to the preparation and provision of information in this section, a firm should take into account obligations in the Handbook that may be relevant, including but not limited to the Consumer Duty and obligations elsewhere in PRIN and in COBS.

CRYPTO 10.3 Key terms of agreement and express prior consent requirement

(1) A firm must provide a retail client with the key terms of agreement relating to its qualifying cryptoasset staking service.
(2) A firm must obtain the retail client’s express prior consent in relation to the key terms of agreement:
1. (a) each time that retail client instructs the firm to provide the qualifying cryptoasset staking service; and
2. (b) before one of the following, whichever is the earlier:
  1. (i) the retail client is bound by any agreement relating to qualifying cryptoasset staking; or
  2. (ii) the provision of those services.
(3) A firm must provide the key terms of agreement in a durable medium or via a website, mobile application or any other digital medium that the firm may be using in relation to the provision of its qualifying cryptoasset staking service (where it does not constitute a durable medium) where the website conditions are satisfied.
(4) The firm must keep a record of the retail client’s express prior consent that is capable of being produced or reproduced upon the FCA’s request.
(5) The key terms in respect of which a retail client must provide express prior consent must include the terms set out in CRYPTO 10.3.3R.

(1) Where a retail client has provided express prior consent for a firm to use any rewards earned in further qualifying cryptoasset staking, as opposed to rewards being transferred or allocated to the retail client immediately, the firm is not required to obtain the retail client’s express prior consent again in relation to the use of rewards in further qualifying cryptoasset staking.
(2) This is provided the use of any rewards in further qualifying cryptoasset staking is on terms that are the same as, or substantially similar to, the original qualifying cryptoasset staking service.

(1) Where the qualifying cryptoasset staking service involves auto-staking, the requirement in CRYPTO 10.3.1R applies each time the retail client instructs the firm to provide an auto-staking service in respect of future holdings of the retail client’s qualifying cryptoassets.
(2) A firm is therefore not required to obtain additional express prior consent from the retail client in respect of each instance of qualifying cryptoasset staking that the firm arranges from time to time using the retail client’s qualifying cryptoassets as part of that agreed auto-staking arrangement.

Key terms

The terms in respect of which a firm must obtain a retail client’s express prior consent include:

(1) the type and quantity of the qualifying cryptoassets the firm will use in the qualifying cryptoasset staking service for the retail client, including the name of the qualifying cryptoasset and the blockchain on which blockchain validation using that qualifying cryptoasset will take place;
(2) how long the qualifying cryptoassets will be used in the qualifying cryptoasset staking service;
(3) the value of the qualifying cryptoassets the firm will use in the qualifying cryptoasset staking service;
(4) the total and component parts of one-off and ongoing charges, fees and commission, including exit fees, to be paid by the retail client to the firm for the qualifying cryptoasset staking service;
(5) the rewards that may be earned pursuant to the qualifying cryptoasset staking service and transferred to the retail client, including:
1. (a) how rewards are determined;
2. (b) in what qualifying cryptoasset or currency the rewards will be paid;
3. (c) the frequency with which any rewards are earned and whether the value or frequency of rewards is variable; and
4. (d) whether the firm will use any rewards earned in any separate or additional qualifying cryptoasset staking;
(6) any restrictions set by the firm on a retail client’s ability to access their qualifying cryptoassets used in the qualifying cryptoasset staking service or to have the qualifying cryptoasset returned to them, and on their ability to access any rewards earned, including whether any financial penalties may be incurred by the retail client;
(7) whether ownership of the retail client’s qualifying cryptoassets transfers from the retail client to the firm or any other person as part of the qualifying cryptoasset staking service;
(8) whether the retail client’s qualifying cryptoassets used in the qualifying cryptoasset staking service and/or any rewards earned are being safeguarded by the firm or any other person on behalf of the retail client;
(9) what the retail client’s rights are to cancel or withdraw from the qualifying cryptoasset staking service, including:
1. (a) any relevant information on the conditions for exercising the right of cancellation, its duration, and practical instructions for exercising it; and
2. (b) any other information material to a retail client’s understanding in respect of the cancellation of the qualifying cryptoasset staking service;
(10) the type and quantity of any cryptoasset(s) that the retail client may receive as part of the qualifying cryptoasset staking service; and
(11) whether any such cryptoasset(s) referred to in (10) received by the retail client as part of the qualifying cryptoasset staking service confer(s) or represent(s) any rights (including ownership) or obligations with respect to the qualifying cryptoassets used in the qualifying cryptoasset staking service.

(1) Where the qualifying cryptoasset staking service involves auto-staking, in addition to those terms set out in CRYPTO 10.3.4R, the terms in respect of which a firm must obtain a retail client’s express prior consent must include:
1. (a) that the firm will use future holdings of one or more types of qualifying cryptoassets designated by the retail client without needing to seek the retail client’s express prior consent in respect of each instance of qualifying cryptoasset staking; and
2. (b) the type(s) of qualifying cryptoasset(s) the firm will use in the qualifying cryptoasset staking service for the retail client, including the name of the qualifying cryptoasset(s) and the associated blockchain(s) or other network(s) on which the qualifying cryptoasset(s) will be used for blockchain validation.
(2) A firm does not need to obtain the retail client’s express prior consent in relation to:
1. (a) CRYPTO 10.3.4R(1) in respect of the quantity of qualifying cryptoassets that will be used in the qualifying cryptoasset staking service; and/or
2. (b) CRYPTO 10.3.4(R)(3) in respect of the value of the qualifying cryptoassets,
if it is not possible at the outset of the auto-staking service to determine and this.

(1) In relation to CRYPTO 10.3.4R(3), a firm should take all reasonable steps to obtain the most recent valuation for the qualifying cryptoassets that the firm will use in the qualifying cryptoasset staking service.
(2) This value in (1) should be presented in GBP.

(1) In relation to CRYPTO 10.3.4R(4), a firm should:
1. (a) make clear which charges originate from the blockchain, such as gas fees, and which charges are levied by the firm; and
2. (b) present any commission charged by the firm as a percentage of the total rewards earned on a retail client’s qualifying cryptoasset(s) used in the qualifying cryptoasset staking service.
(2) Where the qualifying cryptoasset staking service uses a specified quantity of qualifying cryptoasset(s), a firm should present one-off charges for the qualifying cryptoasset staking service as monetary value and as a percentage of the total value of qualifying cryptoasset(s) used in the qualifying cryptoasset staking service.
(3) Where the qualifying cryptoasset staking service involves auto-staking, a firm should present one-off charges for the use of a retail client’s future holdings of qualifying cryptoassets in qualifying cryptoasset staking as either:
1. (a) a percentage of the total value of qualifying cryptoassets used in the qualifying cryptoasset staking service; or
2. (b) a flat charge,
depending on the methodology used by the firm to calculate the charges.

Material changes

A firm must notify a retail client in good time about any material change to the key terms of agreement provided under CRYPTO 10.3.1R(1) relevant to the qualifying cryptoasset staking service that the firm is providing to that retail client.

When considering its approach to preparing and providing key terms of agreement and obtaining express prior consent in respect thereof, as well as its approach to notifications about material changes to key terms, a firm should take into account obligations in the Handbook that may be relevant, including but not limited to the Consumer Duty and obligations elsewhere in PRIN and in COBS, as well as obligations in consumer rights law and any associated and applicable guidance.

CRYPTO 10.4 Notification requirement

(1) A firm must provide a notification to a retail client:
1. (a) within 12 months of the retail client providing consent pursuant to CRYPTO 10.3.1R; and
2. (b) within 12 months of the last notification provided to the retail client under this section.
(2) The notification in (1) must include:
1. (a) all information on the qualifying cryptoasset staking service that the firm would have provided pursuant to CRYPTO 10.2.1R;
2. (b) the key terms that govern the qualifying cryptoasset staking service, which may include only those key terms in respect of which the firm obtained the retail client’s express prior consent pursuant to CRYPTO 10.3.1R or may include terms in respect of which material changes have been made during the course of the agreement;
3. (c) a list of qualifying cryptoassets, and the quantity of each, being used for qualifying cryptoasset staking for the retail client;
4. (d) the total rewards earned by the retail client as part of the qualifying cryptoasset staking service in the past 12 months, or from the start of the qualifying cryptoasset staking service if less than 12 months, presented either as the quantity of qualifying cryptoassets or in GBP; and
5. (e) the total fees and charges deducted over the past 12 months, or since the start of the qualifying cryptoasset staking service if less than 12 months, presented either as the quantity of qualifying cryptoassets or in GBP.
(3) The content of the notification in (1) must be as up-to-date as possible and the firm must state the date on which the information was correct.

(1) A firm should consider whether it may be in the best interests of the retail client to provide the notification in CRYPTO 10.4.1R(1) sooner than 12 months from the point at which the firm obtained the retail client’s express prior consent.
(2) Scenarios in which it may be in the best interests of the retail client to provide the notification sooner may include but are not limited to:
1. (a) where the information needs of the retail client may be greater due to increased complexity arising from the nature of the qualifying cryptoasset staking service;
2. (b) where a retail client has not, for a significant period, accessed the online system (where provided by the firm) through which the retail client can view information about the qualifying cryptoasset staking service; and/or
3. (c) where, as a result of one or more material changes having been made or proposed to the agreement, the firm considers that it would be in the retail client’s best interests to notify them sooner.

A firm must provide the notification required by CRYPTO 10.4.1R(1) in a durable medium or via a website, mobile application or any other digital medium that the firm may be using in relation to the provision of its qualifying cryptoasset staking service (where it does not constitute a durable medium) where the website conditions are satisfied.

CRYPTO 10.5 Record keeping requirements

The provisions in this section apply to an authorised cryptoasset firm when arranging qualifying cryptoasset staking for a client.

For the purposes of this section, references to a ‘client’ need only include a client whose identity is known to the firm.

(1) A firm must maintain records of the following:
1. (a) the amount of qualifying cryptoassets used in a qualifying cryptoasset staking service for each client and on which blockchain, per day;
2. (b) whether the qualifying cryptoassets used in qualifying cryptoasset staking are safeguarded for the client by or on behalf of the firm and, if by another person, by whom;
3. (c) the total amount of rewards earned in relation to each client’s qualifying cryptoasset per day;
4. (d) the total amount of rewards allocated to each client per day;
5. (e) total fees, charges or commissions charged to each client per day;
6. (f) for each client, the type and quantity of qualifying cryptoassets provided to the client which the client may need to return to or exchange with the firm or another person for the return of the qualifying cryptoassets being used in a qualifying cryptoasset service, and the return of any rewards (where applicable);
7. (g) where applicable, the key terms of agreement provided to each client and each client’s express prior consent provided in relation thereto, including the date, time and – where specified in the agreement – the quantity of qualifying cryptoassets used in the qualifying cryptoasset staking service;
8. (h) all requests from clients to terminate the qualifying cryptoasset staking service or for the client’s qualifying cryptoassets to be returned, including the date, time and amount of qualifying cryptoassets requested to be returned;
9. (i) a record of qualifying cryptoasset staking activation, including the date, time and amount of qualifying cryptoassets used in a qualifying cryptoasset staking service;
10. (j) a record of qualifying cryptoasset staking completion, including the date, time and amount of qualifying cryptoassets that are capable of being returned to the client;
11. (k) the total amount of qualifying cryptoassets used in the qualifying cryptoasset staking service lost per day due to operational disruptions;
12. (l) all notifications provided to the retail client pursuant to CRYPTO 10.2.4R;
13. (m) all notifications provided to the retail client pursuant to CRYPTO 10.3.8R; and
14. (n) all notifications provided to the retail client pursuant to CRYPTO 10.4.1R.
(2) Subject to (3), all records in (1) must be retained for a period of 5 years from the point at which the record is generated.
(3) The records in (1)(g) and (1)(l) to (n) must be retained for a period of at least 5 years from the point at which the record is generated or for the duration of the relationship with the client, whichever is longer.

For the purposes of CRYPTO 10.5.3R(1)(i), ‘qualifying cryptoasset staking activation’ refers to the point at which qualifying cryptoassets are used in the blockchain validation process.

For the purposes of CRYPTO 10.5.3R(1)(j), ‘qualifying cryptoasset staking completion’ refers to the cessation of the blockchain validation process and restoration of the same access over qualifying cryptoassets that the client had before the commencement of the qualifying cryptoasset staking service.

CRYPTO 10.6 Obligations in COBS

A firm may satisfy its obligations under this chapter and any other applicable provisions in COBS by means of a single set of systems, controls, policies, procedures, communications or contractual arrangements, provided that those arrangements, taken as a whole, meet the requirements of each applicable provision in this chapter and COBS.

The purpose of this section is to avoid unnecessary duplication of systems, controls and client interactions where a firm is subject to overlapping requirements under this chapter and other COBS provisions.

Point In Time

25/10/2027